In this posting, I offer an inside look at an open house I hosted recently. My aim? To draw lessons for buyers in Portland’s hot market.
A sweet, well-kept bungalow in the friendly Southwest neighborhood of Maplewood, the property was listed at $325,000. Built in 1910, it has a defined entry with coat closet; a window seat, fireplace and original hardwood floors in the sitting room; two bedrooms, one bath and over 1,400 square feet; and a large backyard perfect for entertaining – with a wooden deck and fence.
Though close to downtown, home to a highly rated elementary school, and criss-crossed by hills, creeks and green spaces, Maplewood is not known as a walkable neighborhood. But a house of the same vintage just across the street has been converted to a popular café with garden space. Among other things, it hosts monthly neighborhood association meetings.
Given so many desirable features and a friendly price point, I had expected lots of traffic when agreeing to do the open house a week earlier. And over 20 parties – mostly Millennials – visited in the space of two hours.
The listing agent and I had also expected the home to sell quickly, but we couldn’t know how fast. It sold the day after it went on the market and the open was announced. So I had to break the bad news to each of the visitors Sunday.
A few left without touring the house. Many more said they could understand why it had sold so quickly after having a look around.
Who was the lucky buyer? A Baby Boomer looking for compact, one-level living as she nears retirement. She turned up with her agent toward the end of the open to plan renovations. We talked about removing half the wall between the kitchen and sitting room to create a breakfast bar and open plan living.
I asked if it was her first offer. She laughed and shook her head. Her agent described her as battle-scarred.
The moral of this story?
- Be persistent – You may make several offers on several houses before succeeding.
- Know your needs and wants – If you clearly identify your “must-haves,” you can size up a home quickly and compromise on your wants. It’s normal for your priorities to shift over time as you see more properties. Just stay focused on your current needs.
- Know the market – Home styles, prices and inventories in different neighborhoods are bedrock realities your needs and wants bump up against. The internet and your realtor can help you to understand these realities. Armed with the bulleted figures below, for example, a would-be buyer could have spotted a great opportunity to move into Maplewood at a low price point and predicted keen competition and a quick sale.
- The median price of a home in this close-in, close-knit neighborhood was $380,000 in 2014 (the most current data available)
- Whereas the median for Portland Metro including outlying areas was $300,000 last month
- So the bungalow list price of $325K was much closer to the Metro median than the Maplewood median
- The number of homes for sale in Maplewood decreased by over 31 percent between June 2014 and June 2015
- There were just 7 active listings in the neighborhood at the time the bungalow went on the market
- Be prepared to pounce – Knowing your needs, wants and the market helps you to act quickly. Getting mortgage preapproval before starting your search is also key. And it’s important to view a property that speaks to you as soon as possible after it goes on the market. Waiting even two days may be too late for a good home in a good neighborhood.
- Make your offer sweet – Your first offer should be your best. You may not get another chance. Be prepared to meet or exceed the list price if your realtor determines that it’s fair market value. In some cases, it can be a good idea to include an escalation clause, which commits you to beating the best offer by a certain dollar amount below a stated ceiling. While price is key, other factors can come into play. Your realtor should contact the listing agent to ask about other factors and tailor your offer accordingly. For example, you may win the seller over with:
- a slow or fast closing
- a rent back agreement allowing the seller to stay in the home for up to 90 days while trying to find a new one
- a “clean” offer that minimizes or waives contingencies and conditions
- proof of funds for the down payment and closing costs along with a mortgage preapproval letter
- a personal letter explaining what features of the home wow you